I’ve noticed a phenomenon: When a business owner reaches fifty years old their business seems to get much more successful. I’ve now seen this enough times that I’m thinking there is something to business success and getting older.
I think there are several reasons this might happen. Some of them are:
The business owner has made enough mistakes to finally get it right. We all make mistakes. Those business owners who have had their business last for twenty years or more have made lots of mistakes. During that period they likely learned something along the way.
After 20 years of running a business the owner will have spent thousands and thousands of hours learning what works and what doesn’t. They’ve also learned how to say no to ideas that aren’t going to produce results.
The owner has developed a product at a profit margin that makes them money. When we first start a business we often only want to get sales. As the years go on getting sales is nice but if those sales don’t have appropriate margins then we’re less interested.
As we age we learn more about the financial side of our business. Going to bed worrying about if we’re going to have enough money to pay our bills gets to be old. We start taking actions that are more likely to create cash.
We’ve spent time with our peers who are also becoming successful. If you ask a business owner who they value advice from they will often say their peers. Many times a business owner hangs out with other business owners and naturally they talk about things that work and don’t work in their businesses.
After these conversations an owner will come back to their own business and start making changes their friends have told them about. Often those changes produce results that are very positive.
The owner has learned how to evaluate ideas. This goes along with making mistakes. Not only will an owner make fewer mistakes, but they will be more efficient at evaluating ideas that might work.
After you’ve run a business for twenty years or more you will have learned when an idea makes sense for your industry. Developing institutional knowledge takes a long time. Those who are early in their careers often don’t know if something will work or not. When an owner has been in an industry for years they don’t know why something is right or wrong, but they’re sure they will or won’t work.
What have you noticed as you’ve gotten older? Is your business more successful now than it was before?
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